We are seeing a growing number of class actions alleging consumer harms from corporate carbon offset policies. On October 13, a California federal court threw out such a case (albeit with leave to amend) against e-commerce site Etsy.
The lawsuit, Blackburn v. Etsy, Inc., No. 2:23-cv-05711 (C.D. Cal. 2023), stemmed from a number of carbon offset promises Etsy has made since 2019—that the company engages in “100% offsetting [of] all carbon emissions from shipping[,]” that it was “the first major online shopping destination to offset 100% of carbon emissions generated by shipping[,]” and that its “goal [is] to run a carbon neutral business[.]” Dkt. No. 20 at 1. Plaintiffs alleged that the carbon offset promises were false “due to endemic methodological errors and fraudulent accounting on behalf of offset vendors.” Id. Plaintiffs claimed that Etsy’s false promises caused them harm because they paid more for products on the site than they otherwise would have under the mistaken belief that Etsy’s shipments were carbon neutral.
The court disagreed. Plaintiffs, the court held, had failed to adequately plead an injury in fact and therefore did not have standing to maintain the lawsuit. For a price premium false advertising case, “[t]he bare recitation of the word ‘premium’ does not adequately allege a cognizable injury.” Id. at 6. The prices for the types of goods sold on Etsy—unique handmade or vintage items—could vary for a number of factors that have nothing to do with the carbon offset promises Etsy made. Plaintiffs alleged nothing to suggest that these products were available elsewhere at a lower price. Thus, the complaint failed to include any well-pleaded facts to support the conclusion that the alleged price premium was caused by Etsy’s carbon offset promises.
We will continue to monitor this emerging issue.